Finding Text
Statement of Condition: During our testing of internal control policies and procedures over procurement and suspension and debarment, we noted that management had established a formal purchasing policy, however, the policy did not address suspension and debarment and no procedures were established to ensure that purchases or subawards made under covered transactions were not made to parties that were suspended or debarred. Criteria: In accordance with the OMB compliance requirements and the Code of Federal Regulations (2 CFR 200.214), management must create and monitor internal control policies and procedures to ensure that when the organization enters into a covered transaction with a vendor or subrecipient, policies and procedures are performed to ensure that the vendor or subrecipient is not suspended or debarred or otherwise excluded from participating in the transaction. Cause: Management did not have the proper internal control policies and procedures to monitor vendors or subrecipients nor did they have a proper understanding of suspension and debarment requirements under the OMB compliance requirements and the Code of Federal Regulations (2 CFR 200.214). Effect: As a result, the client was not in compliance with the suspension and debarment attribute as required. Fortunately, no vendors utilized during the year ended June 30, 2022 were listed as suspended or debarred. Recommendation: We recommend that management develop procedures to ensure suspension and debarment procedures are performed for all new vendors and subrecipients. In addition, recurring vendors and subrecipients should be monitored annually to ensure there is no suspension or debarment of that vendor or subrecipient. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at www.sam.gov, (2) collecting a certification from the entity, or (2) adding a clause or condition to the covered transaction with that vendor or subrecipient.